Income Tax Refund for Some PAYE Workers

Finance & Public Service

July 2, 2016

Written by: Shari-Ann Palmer

Photo: Michael Sloley

Chief Communications Officer at Tax Administration Jamaica, Meris Haughton (right), explains the implementation of the new income tax threshold, which takes effect on July 1. At left is Senior Technical Specialist, Monica Walker.

Story Highlights

Pay As You Earn (PAYE) workers whose income now exceed the previous tax threshold of $592,800, but who earn up to $796,536 are to receive a refund from their employers.

Chief Communications Officer at Tax Administration Jamaica (TAJ), Meris Haughton, encouraged employers to make the necessary adjustment during the course of the year.

The measure also provides for an increase in the personal income tax rate for individuals earning in excess of $6 million, who will be required to pay 30 per cent on income as at July 1.

Pay As You Earn (PAYE) workers whose income now exceed the previous tax threshold of $592,800, but who earn up to $796,536 are to receive a refund from their employers.

Chief Communications Officer at Tax Administration Jamaica (TAJ), Meris Haughton, encouraged employers to make the necessary adjustment during the course of the year. She noted that this is in keeping with the (Income Tax (Employments) Regulation) section 14 of the Income Tax Act.

Ms. Haughton was speaking today (July 1) at a JIS Think Tank, where she explained the implementation of the new income tax threshold of $1,000.272, which takes effect on July 1.

This will result in an effective threshold of $796, 537 for the period of assessment for 2016.

Ms. Haughton said that employers may choose to make a lump sum payment or do so on a monthly basis up to December.

Ms. Haughton explained that this process will not cost employers. “What they will be doing is paying less for persons who will still pay income tax to accommodate the refund for eligible persons,” she said.

In the meantime, Senior Technical Specialist at TAJ, Monica Walker, said that if the employer fails to make the necessary adjustment, then it becomes the responsibility of the employee to make an application to TAJ for a refund.

“The employer has the responsibility to make adjustments during the year. If the year closes and no adjustments were made, then it becomes the responsibility of the employee to apply to TAJ for a refund. The refund of tax falls with the Commissioner General of TAJ but the employer has been given the mandate to make adjustments,” she said.

The measure also provides for an increase in the personal income tax rate for individuals earning in excess of $6 million, who will be required to pay 30 per cent on income as at July 1.